Schools and Libraries

Step 4: Contract Guidance

Applicants and service providers must meet all Federal Communications Commission (FCC) and state contract requirements.

CONTRACTS

In general, a contract is a binding agreement, enforceable by law, between two or more parties that creates an obligation to do, or not do, something. Contract definitions and requirements are contained in each state's or territory's contract law.

Except for services to be delivered under non-contracted tariffed or month-to-month arrangements, FCC rules require that an applicant sign a contract with the service provider before signing and submitting a completed Services Ordered and Certification Form (Form 471). Applicants must be able to demonstrate that they had a signed and dated contract in place at the time they submitted a completed Form 471. Applicants must also comply with state and/or local contract law. Obtaining the service provider signature and date is not a program requirement, but state and/or local contract law may include this or other compliance requirements.

Acceptable standards for applicant signature and dated contract examples:

  • Applicant handwritten signature and signature date,
  • Date contract awarded may be contained in the body of the contract, or
  • Date contract awarded may be in the opening statements of the contract.

When state and/or local contract law does not require the applicant to sign and date the contract, the applicant will be given the opportunity to complete a certification statement.  The certification statement affirms that the applicant is compliant with their state and/or local contract law.

Verbal agreements and quotes do not meet FCC requirements.  Generally purchase orders do not meet USAC contract guidelines.  We recommend that if applicants intend to use a purchase order as their contract they check their state and/or local contract laws to ensure that purchase orders meet state and/or local contract requirements.

Establishing Forms 470 
The establishing Description of Services Requested and Certification Form (Form 470) is the form that serves as the basis for the competitive bidding process.  For a multi-year contract, the establishing Form 470 for that contract could have been posted in a previous funding year.

Qualified existing contracts
A qualified existing contract is:

  • A signed, written contract executed pursuant to the posting of a Form 470 in a previous funding year.
  • A contract signed on or before July 10, 1997 and reported on a Form 470 in a previous year as an existing contract.

Tariffed services provided under a contract
A tariffed service provided under contract is a service offered under one or more tariffs and for which a contract has been signed.  In all cases, funding requests for which a contract has been signed should be reported as contracted services.  Form 471 Block 5 should include the Contract Number in Item 15 (not a "T"), the Contract Award Date in Item 18, and the Contract Expiration Date in Item 20.

STATE MASTER CONTRACTS

A state master contract is a contract that is competitively bid and put in place by a state government entity for use by others.

Filing the Form 470
If the state files a Form 470, then the applicant may cite the state's Form 470 on its Form 471.  The state must follow a competitive bidding process pursuant to FCC requirements and state procurement law.

The applicant is required to follow the applicable provisions of the state master contract and state and local procurement laws.  No separate bidding documents or contracts are required by the applicant citing the state's Form 470, other than what is required by the state master contract and state and local procurement laws.  The signed state master contract between the state and the service provider meets the FCC signed contract requirement.

If the applicant files a Form 470 and considers a state master contract as one of the bids, the applicant must follow a competitive bidding process pursuant to FCC requirements and state and local procurement law.  Price must be the primary factor - that is, it must be weighted more heavily than any other factor.

If the applicant selects the state master contract as the most cost-effective alternative, the applicant is required to follow the applicable provisions of the state master contract, state contract law, and state and local procurement laws.  The signed state master contract between the state and the service provider meets the FCC signed contract requirement.

Reporting the Contract Award Date for state master contracts 
The Contract Award Date shall not be earlier than the 29th day after the posting of the Form 470.  If an applicant files its own Form 470 and chooses either a new or a pre-existing state master contract as the most cost effective bid, the applicant should record its decision to purchase off the state master contract after the bidding process is complete and to record the date of this memorialization as the Contract Award Date on the Form 471.

Purchase orders or other state master contract requirements for applicants 
If the state master contract requires the issuance of purchase orders or contains other requirements for applicants, the applicants must meet those requirements.  For example, if the state master contract requires the applicant to issue a purchase order by July 1, then the applicant is required to meet that deadline.

MULTI-YEAR CONTRACTS AND CONTRACTS INCLUDING VOLUNTARY EXTENSIONS

A multi-year contract means a contract that covers more than one year.  For example, a three-year contract would expire at the end of the third year.  A contract including voluntary extensions means that the contract expires at the end of its original term and may be voluntarily extended for one or more years pursuant to the provisions in the contract.

To comply with FCC competitive bidding requirements, the applicant must indicate in its Request for Proposals (RFP) and Item 7 on the Form 470 its intent to enter into a multi-year contract for services or a contract that includes voluntary extensions.  The applicant must also indicate the type of services for which it is seeking a multi-year contract.

When voluntary extensions are indicated in Item 13 of Form 470 and in the RFP, if an RFP was used, the applicant does not have to post a new Form 470.  In the event the Form 470 does not indicate voluntary extensions, the contact cannot extend the contract beyond its original expiration date without posting a new Form 470.

FCC rules grant a limited extension of the competitive bidding rules for contracts for non-recurring services.  "[C]ontracts for nonrecurring services may be voluntarily extended to coincide with the appropriate deadline for the implementation [of delivery and installation for nonrecurring services].  Parties may not, however, extend other contractual provisions beyond the dates established by the Commission's rules without complying with the competitive bidding process."  (FCC 01-195, released June 29, 2001).  If an applicant is granted an extension of time for delivery and installation of non-recurring services, the applicant may extend the relevant contract without rebidding.  Applicants should file a Form 500 to notify USAC of such contract extensions.

Multi-year contracts for newly-eligible services or entities
If the original Form 470 or RFP did not include the newly-eligible services or entities, the applicant will be required to post a new Form 470 for those services.


Last modified on 2/22/2008